Beef Prices Set New Record Highs

If the headline looks familiar, it is because it was the same in July. I suspect that it will be a headline that gets reused in the near future as well.

Retail beef prices rose nearly 4¢ in August to reach $5.394/lb. From a rancher’s perspective, the price increase was especially good news in that the increase went almost 100% to the ranch level. The wholesale to retail, and farm to wholesale spreads continued to narrow slightly, proving yet again that is the producers who hold the leverage in this current market.

If one is looking for the dark cloud in all the blue sky, there continues to be questions about how high we can push prices before turning customers away. The question now is simply how high can we go? The price spread between beef and its main competitors continues to widen, which isn’t good news, and the overall economic indicators remain dismal, which certainly raises some red flags. While we will continue to see seasonal fluctuations, supplies will remain supportive in general, so the question will be how will the consumer respond as prices continue to rise?